Investors gravitate to ecommerce platforms leveraging social media
, ET Bureau|
Updated: Oct 25, 2017, 08.15 AM IST
BENGALURU: Ecommerce platforms leveraging social media platforms such as Facebook and WhatsApp to reach their hundreds of millions of users are beginning to attract marquee investors.
Y Combinator-backed social ecommerce startup Meesho raised $3.1 million in funding led by SAIF Partners this month. In September, customer-to-customer reseller network GlowRoad raised $2 million from Accel Partners.
And in more signs of traction in this space, Singapore-based Jumper.ai, which helps merchants in the US, the UK and Southeast Asian markets sell through Facebook, Twitter and YouTube, is set to enter India in January. “When we started in Mumbai last September, no one including merchants and investors were interested since the concept was very new. Which is why we decided to shift base to Singapore and target other markets,“ said Yash Kotak, co-founder of Jumper.ai.
“However, since the concept has worked well in the West with Shopify and BigCommerce, several players (in India) are now getting into the space and investors are interested too.Merchants are now looking to tie up with us.“
Payment gateway PayU, which launched a product called Sellfie last year to enable merchants and individual resellers such as homemakers collect payments through Facebook, WhatsApp and other channels, is working on introducing more vendor services. The Naspers-owned company has budgeted Rs 200 crore for this product.
“While we have been so far focused on the payment service to help even offline sellers take digital payments, we now look to offer more services to sellers to help them sell through our platform, including shipping, marketing and accounting,“ said Pradeep Shekhawat, head of small and medium businesses at PayU India.“We should start offering shipping services in the next couple of months.“
Bonney, along with his wife, sells apparel through Facebook and uses PayU's Sellfie--rebranded PayU Now--for receiving payments. The Mumbai-based couple ships orders through India Post. “My wife, Ann, started this as a hobby on Facebook and now we get about 200 orders a month from the nearly 150,000 followers we have on our Facebook pages,“ he said. “The biggest advantage is that we do not have to worry about product specifications or number of orders as on ecommerce websites.“
LEVERAGING SOCIAL MEDIA
GlowRoad began operations with an idea to help women, especially homemakers, earn by becoming resellers within their social circles using medium such as WhatsApp, while also enabling wholesalers reach a larger audience. It currently has 36,000 active resellers and 7,000 suppliers handling about 1,000 transactions a day--mainly fashion, jewellery and home furnishing products--across 400 cities and towns.
“Such platforms help women earn through a distribution network within their circles using WhatsApp and Facebook by selling products with a markup of up to 20%. For suppliers, it helps cut down on costs of customer acquisition and distribution,“ said founder Sonal Verma.
To attract small merchants, these platforms pack additional services for them. Meesho “not only provide(s) logistics and payments services to Rshome preneurs' (through partnerships) but also sourcing through our supply marketplace“, said co-founder Vidit Aatrey .
Jumper.aiuses artificial intelligence to help sellers reach users directly on Facebook, Twitter and You Tube. The company, which works with 52 enterprises and 371 small and micro merchants, has also created a chatbot to enable discussions between sellers and consumers within social media platforms. Many of these businesses work on a subscription model to generate revenue. GlowRoad, for example, charges wholesalers Rs 1,000 a month. It currently does not charge resellers any commissions.
OPPORTUNITIES & CHALLENGES
According to research platform Zinnov, there are 1.8-2 million such online resellers in the country clocking about $9 billion in annual commerce value. Their number in India is expected to increase to 20 million by 2022. There are, however, some challenges, one being the high attrition among resellers.
The bigger worry, though, is that all the three dominant social media platforms for ecommerce in India--Facebook, WhatsApp and Instagram--are owned by Facebook, which in recent years has launched its own online store formats. “Facebook, which has already launched Facebook Shop in the US, could look to do the same here,“ said Rahul Chowdhri, Partner at Stellaris Ventures.
Y Combinator-backed social ecommerce startup Meesho raised $3.1 million in funding led by SAIF Partners this month. In September, customer-to-customer reseller network GlowRoad raised $2 million from Accel Partners.
And in more signs of traction in this space, Singapore-based Jumper.ai, which helps merchants in the US, the UK and Southeast Asian markets sell through Facebook, Twitter and YouTube, is set to enter India in January. “When we started in Mumbai last September, no one including merchants and investors were interested since the concept was very new. Which is why we decided to shift base to Singapore and target other markets,“ said Yash Kotak, co-founder of Jumper.ai.
“However, since the concept has worked well in the West with Shopify and BigCommerce, several players (in India) are now getting into the space and investors are interested too.Merchants are now looking to tie up with us.“
Payment gateway PayU, which launched a product called Sellfie last year to enable merchants and individual resellers such as homemakers collect payments through Facebook, WhatsApp and other channels, is working on introducing more vendor services. The Naspers-owned company has budgeted Rs 200 crore for this product.
“While we have been so far focused on the payment service to help even offline sellers take digital payments, we now look to offer more services to sellers to help them sell through our platform, including shipping, marketing and accounting,“ said Pradeep Shekhawat, head of small and medium businesses at PayU India.“We should start offering shipping services in the next couple of months.“
Bonney, along with his wife, sells apparel through Facebook and uses PayU's Sellfie--rebranded PayU Now--for receiving payments. The Mumbai-based couple ships orders through India Post. “My wife, Ann, started this as a hobby on Facebook and now we get about 200 orders a month from the nearly 150,000 followers we have on our Facebook pages,“ he said. “The biggest advantage is that we do not have to worry about product specifications or number of orders as on ecommerce websites.“
LEVERAGING SOCIAL MEDIA
GlowRoad began operations with an idea to help women, especially homemakers, earn by becoming resellers within their social circles using medium such as WhatsApp, while also enabling wholesalers reach a larger audience. It currently has 36,000 active resellers and 7,000 suppliers handling about 1,000 transactions a day--mainly fashion, jewellery and home furnishing products--across 400 cities and towns.
“Such platforms help women earn through a distribution network within their circles using WhatsApp and Facebook by selling products with a markup of up to 20%. For suppliers, it helps cut down on costs of customer acquisition and distribution,“ said founder Sonal Verma.
To attract small merchants, these platforms pack additional services for them. Meesho “not only provide(s) logistics and payments services to Rshome preneurs' (through partnerships) but also sourcing through our supply marketplace“, said co-founder Vidit Aatrey .
Jumper.aiuses artificial intelligence to help sellers reach users directly on Facebook, Twitter and You Tube. The company, which works with 52 enterprises and 371 small and micro merchants, has also created a chatbot to enable discussions between sellers and consumers within social media platforms. Many of these businesses work on a subscription model to generate revenue. GlowRoad, for example, charges wholesalers Rs 1,000 a month. It currently does not charge resellers any commissions.
OPPORTUNITIES & CHALLENGES
According to research platform Zinnov, there are 1.8-2 million such online resellers in the country clocking about $9 billion in annual commerce value. Their number in India is expected to increase to 20 million by 2022. There are, however, some challenges, one being the high attrition among resellers.
The bigger worry, though, is that all the three dominant social media platforms for ecommerce in India--Facebook, WhatsApp and Instagram--are owned by Facebook, which in recent years has launched its own online store formats. “Facebook, which has already launched Facebook Shop in the US, could look to do the same here,“ said Rahul Chowdhri, Partner at Stellaris Ventures.
